The global financial system is floating on a sea of worthless paper assets. Unfortunately, the majority of people still haven’t figured out that the end of this fiat monetary system is close at hand.

While the Fed’s QE machine continues to pump out $Billions of Dollars of worthless currency, the fundamental valuations of gold and silver continue to grow hidden from plain sight. As the world’s electronic trading systems move $trillions in and out of Treasuries, Bonds, Equities and Derivatives on a daily basis, a fraction of this amount is moved into physical gold never to return.

Of course Main Stream Media has no clue that the fraction of this currency being exchanged for gold will turn out to be one of the best investments in the future. You almost can’t blame their ignorance as the present paper valuations of gold and silver have not kept in pace with the world’s printing presses.

If we look at the charts below, we can see how the price of gold and silver have reacted to increase of Fed assets:

Before QE2, in Sept of 2010, the average price of gold was $1,342. Within one year and after $600 billion worth of Fed purchases, the average price of gold hit a record $1,772 an ounce in Sept 2011. However, after the Fed announcement of QE3 in Sept 2012 the price of gold declined from $1,626 to an average of $1,350 presently. What a difference from one QE program to another.

The same trend has taken place in silver:

Here we can see that silver increased from $23.40 in Sept 2010 to average $41.96 in April of 2011 during the Fed’s QE2 policy program. Again, the same reverse trend that took place with gold during QE3 also occurred with silver. When the Fed started QE 3, the average price of silver in Sept 2012 was $33.61. But, a year later after the Fed increased its balance sheet $750 billion, the price of silver ($22.66) is now lower than it was before the Fed began its QE2 program.

Furthermore, this divergence can be seen in the next chart which shows the price of gold compared to combined balance sheets of the FED, BOJ, ECB & BOE:

The price of gold has been rising along with the huge increase of these central bank balance sheets until the end of 2012. If you look at the top right-hand area of the chart, the price of gold is now at the same level when the combined assets of these central banks was nearly $2 trillion lower.

Something doesn’t make sense here, but what does today? The financial networks today are more for entertainment and amusement purposes, rather than a medium to provide prudent economic and financial reporting.

The world is heading towards a financial and economic collapse while very few are prepared for what’s coming. Mike Maloney is one of the few voices out there warning of this great transfer of wealth to come, as paper assets collapse while the value of gold and silver explode.

I highly recommend the video (at link above) for those who have not yet had the opportunity of watching this episode. Mike explains how the Dollar is being increasingly shunned by world governments as they conduct trade in gold or with their own respective currencies.

The rate at which the dollar is being abandoned by international trade portends the end of the US. Dollar as a reserve currency much sooner than later. This is the very reason why the paper price of gold and silver have been manipulated lower since 2013. The threat of much high gold and silver prices is an immediate threat to the Dollar.

It is truly amazing to see the price of silver actually lower than it was before the Fed’s QE 2 program in 2010. Furthermore, the price of gold is also not much better off as it is only a few dollars higher during the same time period.

While the central banks have been able to prop up the fiat monetary system a bit longer, the fundamental valuations of gold and silver are hidden out of view awaiting for the right time to explode Unfortunately, the majority of investors will not be able to take advantage of this great wealth transfer as the revaluation will occur virtually overnight.

The time to exchange fiat currency for real money in gold and silver is running out.

“Something doesn’t make sense here, but what does today? … The world is heading towards a financial and economic collapse while very few are prepared for what’s coming.”

Steve,

Until you trip yourself up via an unconscious adherence to the orthodox interpretations of your ‘goldbug’ audience, your EROI perspective leads you unerringly towards accurate analysis, and the simple truth. For example, few people other than yourself and I have zeroed in on Barrick Gold as a lynchpin in unraveling the real narrative. Grazing even a little bit closer to that subject would create a major backlash. That’s exactly why I say that your work is important. IF you don’t allow yourself to be diverted into CONSENSUS GOLDBUGGERY diversions. As a small scale farmer I spend almost all my time outside in the sunshine… I find it an efficient anti-dote to those mental distractions sent over the internet to delude us from pursuit of truth. You seem to be on the same wavelength. Plants and animals are our natural allies in separating the real from the unreal!!

Yes, things ‘don’t make sense here – and indeed the world is heading towards a frightening collapse. But a great many of those who may believe that they are among the very very few even half-way prepared are victims of their own pipe dreaming cultism. Chief amongst whom are many of my brethern of the bar\n coin.

As you yourself have most presciently pointed out, ” Life is more than a single life-span…. it continues.” And in that vast continuum of soul progression, I can think of no better way of ensuring one’s advancement than to be able to save some of these tortured goldbug souls from their own self-destroying fantasies. That opportunity – via this site – is uniquely yours.

We, as a community of precious metals investors, have been long overdue to establish a concordat of holders UNBEHOLDEN to the narratives of the pumpers and pimps of the ‘hard money’ variety, who can come together collectively in using our brains to puzzle out what is really going on here… and what strategies best avail us in order to survive the coming storm .

By studying monetary and financial history from the perspective of ENERGY, the pm community is availed an opportunity to break free of it’s many subtle HANDLERS, and become a self sufficient, independent, and ultimately successful group of soul survivors, outside the grasp of the forces of evil, and there many minions.

Looking forward to your consideration of my very ‘rogue’ precious metals investor perspective, and to the next attack of the parties entrusted with preventing this site from reaching its’ potential to change a lot of people’s lives… for the better! As they reveal themselves, so ye shall know them!

btw- congrats on getting mention on Sinclair’s site yesterday. Hopefully a significant part of the herded victims of the goldbug fantasy narrative will click your link, and enter a new point of contact with the world as it really is.

rogue... Kudos for the Sinclair mention. I actually had one of my Comex Gold charts on his site several months ago. That day was one of my best traffic ratings ever as that post went viral. As I have mentioned before, if I include “ENERGY” or the “EROI” in the article, the reads, DRY UP AND BLOW AWAY. It says something about the curiosity of the typical investor.

So, for me to keep readers coming to the site, I have to put out PUFF PIECES that receive the majority of reads. Then, I throw in some EROI and ENERGY stuff in the event that more readers will take a peak.

If I only wrote about what I thought was important, I would end up like my favorite cartoon character holding the sign, THE END IS NEAR at some street corner with hardly anyone paying attention:

That being said, I don’t believe the masses will wake up to the fact that the falling EROI is really a good thing for them in the end. However, I see the falling EROI forcing TPTW – The Powers That Were to lose a great deal of their power and wealth.

Mankind will never make the right decision. Nature or the laws of physics will force it upon masses of the world.

Sadly people don’t like to hear the truth. Easley people believe Storys turning positive at the end of the Day. If you come out with a depressing story people just don’t want to believe it despite overwhelming evidence being shown to them.
Up to the jear 2005 I was a total sheep believing every thing the mainstream media is going to tell me. I was always very technical interested. Strong rising oil prices awakened my interest in oil. It began with an article on the German Wikipedia about oil. I here the first time obout peak oil. With the media denied peakoil at all i became aware of al the the lying in mainstream media. I began to to read sites like the theoildrum. I began to read about 911 also. Both things as an example people don’t want to believe in. From reading the theoildrum i became interested in financial things also.
I don’t follow mainstream media anymore. I get sick from manipulation the want to put in my head.
Many people in the 911 camp don’t want to believe about peakoil they think it is a conspiracy theory.

Many people in the peakoil camp think 911 is a conspiracy theory.

and many Gold bugs think peak oil and 911 are conspiracy.

I hope you don’t change in the way just to write only things people want to here.

Sorry to come up with 911 here it is just an example what some people want to avoid to talk about because it put them in conspiracy corner.

Steve write about EROI and Net energy and Resource depletion.
There is so many sites writing about the other stuff but only one site wite about this.

I’m assuming that you want the reader to follow you, given the lengthy soliloquy. However, please understand that if you do not explicitly define your terms, nobody will understand what you are talking about.. A goldbug fantasy narrative can be million different things, depending upon your perspective. A descriptive definition with some context would be helpful. Thanks,

I am surprised that the western central banks manage to manipulate the PM price to that low and for that long. OTOH, they are losing a lot of PM reserve which they are just buying time until there is no where to run. The Fed can’t even afford to taper a fraction. I have no doubt the debt ceiling will pass without much fight. When Yellen comes to the chair, she will increase the QE and probably advocate negative saving interest rate.

Other than bankrupting you, and creating a homage remake of Chas Bronson’s Death Wish series, I’m not sure what buyng(way over-priced) ammo would do for a guy at this point. The 3-lettered organs of the Security State are now well supplied with the necessities with which to create 100k mini-Waco Texas scenarios.

I’ve said what I needed to already in this past week here… don’t need to ‘try.’ For those few open to getting the message, it’s already delivered. But if your question is a sincere one, here’s the redacted version of what precious metals holders need to know are are being purposely kept from hearing:

Other 3-lettered organs of that same SS(the ones that don’t pack guns currently- but are apparently mandated in the future to -see the cute cartoon on Jimmy Sinclairs’ re that one!)are already possessed of the [il]llegal authority to secure and confiscate your personal pm assets; no matter where in the world you keep them.

In co-ordination with their ‘big-eared’ buddies over in Utah, they are assembling the info about you and your stash as we speak… via all of the information which you think is secure but is a 24/7 leak. Think of that as a new angle on the constant joke which the goldbug lemmings circulate amongst themselves… the boat with the hole is their supposedly secure and private stash… and the bottom of the lake is owned and operated by Big Bro and friends.

When the time is deemed right, by the comrade in chief and his bolshie buddies in DC, the brethern of the bar/n coin are going to be defrauded of their assets faster than you can say “USA is not Somalia” – the time of rule of law is long past… and those who ask for whom the bell tolls are already the walking dead.

Because I’m just another guest here, I try to avoid making specific statements in reference to the above: a) cause I don’t really want to get Steve’s project here the unwanted attention that truth-telling inevitably brings… b) cause being a gentleman of the old skool, I always wait for an invitation, before arriving at the party. So for now, consider what I’m “trying to say” as deliberately what Steve calls “obtuse” … and what others here pretend to be hard to comprehend. The truth is incredibly simple … but increasingly forbidden. Let’s wait n see which way the wind blows here!

steve,
i just browsed thru sales schedules of china’s mint.
right now, china’s mint sells about 50% more gold coins/bullions than US mint, but over 70% less silver coins/bullions than US mint. sales volume has roughly quadupled since 2008.

in and before 2008, sales volume was a tiny fraction of US mint, especially silver panda, less than 1 million coins were minted every year before 2010. volume of silver panda took off in 2011, it now stands at 8 million ounces per year.
if you think this info can be useful. i’ll spend some time compiling it.

judejin… yes it would be interesting to know what the real Chinese Mint Figures turn out to be. I know the Chinese Mint releases “Mintage Figures” for its official coins, not sales. I thought for sure the Chinese Mint would be producing over 10 million oz of the Chinese Silver Pandas. I think the Panda is by far one of nicest official silver coins on the market.

“The global financial system is floating on a sea of worthless paper assets.”

Sovereign paper assets are significantly inflated – they’re not worthless. Their value comes from taxation authority. Until there is serious reform in usa health insurance and entitlements, the situation will continue to deteriorate. We need a German health care system – 1/2 the cost vs. usa and better results.

Many moving pieces in the gold end game.

Their are 1500 billionaires in the world. Anyone of them, I believe, potentially could bust the paper gold market. Could happen at any time. Buy 20 tons of gold for immediate delivery and simultaneously sell it short 2 months out. 1 ton of gold has a market value of $42 million. Well capitalized senior gold producers could also end the paper game. If 20 tons does not work, double up. They have nothing to lose – they’re hedged and the cost of short term money is not significant. Any hedge fund should understand that there is substantial risk of a comex bust any time. They’re so focused on greed and have elected to ignore the obvious.

For 3 decades the bullion bankers have leased gold from the NYFed to fulfill their short sales. The NYFed though is running out of gold. The current eligible comex gold inventory is about 20 tons. Much of this gold has already been spoken for – outstanding warrants from prior transactions plus unfilled deliveries on 3rd qtr. contracts. On top of this October 2013 contracts just closed and looks like buyers are going to take delivery of 17 tons.

JPM, the top bullion banker, however, is net long comex gold – my guess is about 200 tons per bank participation report. The noncommercial guys appear to be short. No idea where they come up with the gold.

Gold forward rates, on the other hand, have turned positive after about 1 month of being in negative territory. This says the scarcity of gold is not as severe. Suggests to me that the NYFed leased additional gold in response to negative gofo. At some point the NYFed will stop the transfer of gold from west to east. Many folks have been saying this for decades but this summer is the first time in history that gofo has been negative for 1 month.

Gld tonnage continues to drop. Down to 905 tons, down 455 tons from start of the year. Drop 3.6 tons on Friday. Pace of decline though in last 2 months has slowed down a lot suggesting to me liquidation is 95% complete.

Despite the indian gov’t attempts to stamp out demand, it appears that 3rd qtr. global demand is still strong. Read recently that there is a thai trading out which expects to buy 200 tons of gold in 2013 – 10% of global gold production ex-china and russia. Every time gold tanks, volume on the shanghai gold exchange doubles. In Gold We Trust have some nice graph on sge deliveries vs. global gold production.

Now, that is not the whole list, but its a good start. While some of these assets will be worth pennies on the dollar, some will just EVAPORATE in thin air. Furthermore, if a person loses 90-95% of his or her asset value… I happen to think a good definition for this sort of loss would be a “worthless paper asset.”

The Falling EROI of energy will destroy the value of most assets going forward… even those many believe are safe. One of the biggest so-called assets in my BULLS-EYE is Real Estate.

Typical Tilt-Up Warehouse: Not a Good place to Invest

I see Real Estate values of all kinds falling considerably as the coming ENERGY WALL will destroy the suburban economy. If anyone drives around the city and notices new large warehouse buildings going up… these will soon be apart of the scads of vacant buildings with little or no value.

Tell me about abx – “lynchpin unravelling the real narrative”. I’ve read the 2003 abx/jpm/blanchard lawsuit regarding hedging and am familiar with their history. I’ve read their financials and stats of their 26 mines published on their website. Please elaborate and tell me something specific.

Repetition of the below-quoted message here was enough ‘specific’ and ‘hard’ information for anyone of honest and open interest to chew on for a couple of days… your speedy and outspoken rejection of the significance of this denial of service in the interests of the all-seeing Security State was enough of a red flag to alert me to the improbability of sincerity in any further request you might make of me.

Not Acceptable! An appropriate representation of the requested resource could not be found on this server. This error was generated by Mod_Security.

Once you explain what so got up your nose about my modest contributions here earlier this week, as to cause you to make such an effort to snuff the opinions of other precious metal investors who are in no way secondary to yourself(except in imagination!), I will indeed deliver the goods about the above quoted position on Barrick.

But it’s your corner that you’ve painted yourself into with the typical arrogance of the goldbug cultist who seeks to crush all alternative perspectives… and it’s your job, to get yourself out of same. Don’t even try to pretend that the ball is not in your court sir. This is not the typical gullible goldbug you are talking with. I look forward to the day we can sincerely “exchange information” together.

Till then.

msg delivered in open …. as a result of this continuing problem on steve’s server…

“Not Acceptable! An appropriate representation of the requested resource could not be found on this server. This error was generated by Mod_Security.”

This is how the Security State intends to collect the personal date with which to defraud pm investors out of their assets. Nuff said.

so what makes you so sure the proxy thing keeps you anonymous? If you are a person of interest for whatever reason, do you really think the multi-billion dollar spy apparatus can’t find you and shine a bright light up your ass? I bet they can if they want.

And what’s so frightening about going to a website like SRS-Rocco? Absolutely nothing illegal and it doesn’t mean you have a giant vault with stacks of gold bars. And so what if you do have $500 worth of sliver? The US mint itself sells the stuff. Are they going to send a swat team to everyone’s house and round up 10 mercury dimes? There may be some of that, but I just can’t imagine the budget is big enough to go after every $100 stacker. How many gallons of diesel is that per stacker. They’ve telegraphed their next most likely move which is the bail-in. This can be done electronically, cost-effectively and probably even without the knowledge of most Americans.

Perhaps it will be illegal in the future to trade with PMs. But by then, that means the currency has probably died, so one is focked anyway and thrown by force into the black market eady or not, sink or swim, shit or get off the pot..

My biggest problem with PMs is that they could get you killed, probably by one of your post-carbon neighbors more so than the TPTB, so I personally think it is a higher priority to invest in relocation out of the city, skills, friendships, hunting, growing food etc… since these things are harder to take away from somebody.

” Once you explain what so got up your nose about my modest contributions here earlier this week, as to cause you to make such an effort to snuff the opinions of other precious metal investors who are in no way secondary to yourself(except in imagination!), I will indeed deliver the goods about the above quoted position on Barrick.”

Okay Guys… I realize we may have different opinions and views here, but I find it more constructive if we can be a bit more respective of others comments and viewpoints. Also, its no fun getting ganged up on.

Lastly, we all make assumptions. I happen to believe many of mine will take place in the future, but there is no guarantee. So, if we can (on all sides), try to leave out the more negative synonyms of each other, and focus on a more professional debate… I’d appreciate it.

If we have to say something negative, let’s focus it at the CLOWNS & NITWITS on Wall Street, MSM and in the upper levels of Govt. where it is most certainly deserved.

Great work as usual Steve!! I have a question I was on provident’s site and they have copper rounds and rhodium for sale.. I was just wondering what your expert opinion is on metals outside gold and silver?

Adam…. I have seen some of the nice copper rounds at Provident’s site. While these copper rounds are inexpensive, many of them are being sold for 3-7 times the price of copper. A single Silver Eagle at Apmex is going for $26.19, which is about a $4.50 premium or 20%.

Even though that does seem like a large premium, it’s nothing compared to many of the 1 oz copper rounds going for $1.49 a piece. Right now copper is about $3.30 a pound and there are 14.58 troy ounces in a pound. So, that comes out to be about $0.23 an ounce.

Basically, someone who stocks up on those nice 1 oz copper rounds are paying 6.5 times the price of copper. That is a huge premium. Furthermore, it takes a great deal more copper to equal an ounce of silver — nearly ten times.

Rhodium is a strange precious metal. Some believe its price will increase in the future. However, if I was to purchase other metals besides gold & silver, it would be Platinum first then Palladium.

When the great revaluation comes, most physical assets will hold their value, even copper & Rhodium. But, I think I would rather park most of my fiat notes into the top precious metals and if I wanted to buy some copper, I would make sure the coins or copper I was buying came as close to spot as possible

You guys give the government wayyy too much credit. Having seen the inner-workings of government work I can comfortably say that they are so far from having their shit together that this confiscation of PMs talk is BS.

western disintegration at this point is inevitable. even fed officials commented about the hollowing out of USA.

“slave labor” in china and other “developing countries” have taken most of the manufacturing jobs.

but once post-disintegration rebuild starts, i believe the western world can recover very quickly.

when the western worlds start to take back manufacturing jobs, china will start to disintegrate(communist monopoly of power will disintegrate).

the world runs in cycles too. the lowest point is where you buy, just make sure it has bottomed!

i left china in 1994, most of my schoolmates have fared better and easier by staying put in china because china has reached the bottom in the 70s and have been rebounding and making new higher(economically) ever since!

folks living in bigger countries actually suffer more because the govt is usually more powerful and evil in bigger countries.

there are quite a few peaceful small countries that offer good lifestyle.

steve is talking about moving to hawaii. but aren’t you afraid of nuclear fallout from fukushima?

i’m thinking about tailand, where marc faber hides out. or one of the scandinavian countries where the ladies are very beautiful.

Picking off fleas with tweezers, while attempting to keep the dog still!

Pay attention to the fundamental macro, financial/politico ramifications, of the present paradigm.

The fundamentals indicate a probable future course only. Change will occur. A new paradigm will arrive to replace what is here now. The degree to what level of preparation you are comfortable with, depends entirely upon that individual.

This present type of discussion is counter-productive and very short sighted, as if argueing over the length of tweezers to use, will effect the outcome!

The physical ownership and possesion of gold and silver is foundationally fundamental. End.

Michael Maloney continues to do a great job summing up, simply, concepts that so many need to help them through what lies ahead. His comment that you are either in paper assets or tangible assets draws a line that people can comprehend and put to use – a line that folks need to figure out how to cross, in ways that may work for their individual situation. I prefer not to think of crisis as opportunity, but it can be, and that perspective may be very useful for many. So I’ve no objection to the pitch.

The summary points to the third Episode of Hidden Secrets of Money are succinct:

“There is a global loss of confidence that is accelerating rapidly.”
Too true, too many, and no need to list to list here at SRS. This may be the most important point though.

“The change to a new monetary system is inevitable and will most likely be chaotic.”
It could be otherwise, but I wouldn’t bet on it; the chaos will likely be unprecedented. Confiscation, or just plain loss, of anything and everything will remain a dark potential of chaos. Nonetheless, people need to prepare in any way they can; frame of mind, useful skills, tangible assets, stepping outside the system… because change is inevitable – embrace it.

“Gold Standards do not work over long periods of time but gold itself does.”
I’ve not seen someone high profile to make this short but accurate statement until now. Most probably see the two terms as synonymous (SRS readers excluded). The statement contains the seed to a much larger concept – separating a corruptible monetary system with a high form of barter. And from my perspective, also in line with Pieces of Eight, the U.S. Constitution put the us on a Silver Standard – in opposition to banking gold standards.

“The public contributes to the massive amount of currency creation by using credit cards and signing loans.”
This is another key point – what exactly comprises the current global reserve currency? Clearly credit card accounts expand this fiat creation. What about derivatives? Have these insidious derivatives effectively created even more currency?

“Gold has already accounted for the expansion of U.S. Dollars twice in the last century and may likely do so again.”
A reasonable deduction, the potential is there.

The progress charts are excellent tools as well. Michael Maloney may not include EROI into his grand perspective, but no one covers all angles. Maloney’s presentations on the devolving monetary process are a public service.

dale… actually the more I watch and read Maloney’s work, the more I am impressed. Of course, Mike doesn’t have all the answers, but at least he is educating people in the fine art of “ECONOMIC ENERGY” — gold and silver.

I believe one of biggest FAILURES TO UNDERSTAND, in the precious metal community is the “Energy Factor.” Some believe that when the great revaluation of gold and silver take place, then it might be prudent to unload some of this wealth into other assets such as Real Estate, Farmland and Businesses.

I happen to think it might be just best to hold onto that wealth (IF YOU CAN…LOL) because the majority of assets will continue to decline in value in an Energy Constrained Environment. However, there will be certain places that will actually be better to invest in such as Real Estate in small towns and cities near farmland.

Farmland in the east (north-south) will do better than mid-west as water-irrigation becomes a huge issue. Also, better to own smaller farm land plots like 5-20 acres rather than the 1,000-5,000 large tracts that will become a less viable food production system in the future.

Also, certain states will do better than others. Utah is one that I believe will be up there because of the Mormon religion in preparing its members for what is coming. Furthermore, the state still has a great deal of natural resources to provide for itself. Florida is one state that will revert back to a more a simple agricultural economy and those millions of poor retired people will be in trouble when the whole Entitlement House of Cards implodes.

” I am not just referring to Sovereign Wealth Funds, but the following:

1) $100′s of trillions in the Interest Rate Swap Derivatives Monster”

I’m constantly looking for data/info to access my investment portfolio. If the site does not fulfill my objective, I’ll move on. I’m not here to participate in name calling or for that matter to argue or debate.

However, I’ll speak up if I believe the data/info is not accurate. Steve, I think the 100’s of trillions in interest rate swap you refer to is a notional amount. The gross market value amount is a small fraction of the notional amount. – perhaps 5% of the notional amount. On top of this, the net market value amount is around 10% of the gross because of bi-lateral netting. So to put things in perspective, it’s something like 5% times 10% or 1/2%. Still, a very big number and poses serious global risk due to counter parties.

I consider the leasing of gold by western central banks over the last 3 decades to pose a huge problem which could result in the bk of many of the bullion bankers who also are big players in global derivatives.

I find it very interesting to learn others views in relation to valuations of gold and silver. The fiat system is dead. There is a very short time in which you all should buy physical Gold and Silver, not iShares, ETF and other toxic products out there! Start buying gold and silver NOW! Because its going to come to a time when its going to be “how much gold do you have” and not “how much money do you have”!

I’m a newbie to investing in pm’s but have managed to trade out my small capital of dollars(50k) for some semblance of safeguard per Mike Maloney’s educational guidance. I’m also wondering what impact there may be in availability of gasoline, and whether we should think of storing that type of commodity just for transportation purposes. That would also affect my choice of transportation, which is now a gas-guzzler Ford 250 P/U. Since this site also includes energy concerns, I would appreciate some imput/ perspective on this very real issue of future transportation and fuel avialablity/costs.